Metaplanet posts $170 million loss as Bitcoin sale and price drop weigh on earnings

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Metaplanet posts Bitcoin loss

Highlights

Metaplanet posts a net loss of 27.16 billion yen ($170 million) for the first nine months, reversing a year-earlier profit of 13.53 billion yen due to $128 million in Bitcoin-related losses.
The company boosts Bitcoin holdings by 1,000 to 44,000 BTC after selling 10,000 BTC for 124.7 billion yen and repurchasing 11,000 BTC for 149.9 billion yen, incurring a 9.3% higher average buy price.
MSCI removes Metaplanet from its equity indexes as of Nov. 30, while Bitcoin drops 9% to $68,600, amplifying balance-sheet and fund outflow risks.

Bitcoin sale, borrowing and earnings pressure

As reported by Cointelegraph, Metaplanet swings to a net loss of 27.16 billion yen, about $170 million, in the first nine months through September, compared with a profit of 13.53 billion yen a year earlier.

The Japanese company says a 19.17 billion yen loss on the sale of 10,000 Bitcoin and an 8.04 billion yen loss from the decline in the value of its Bitcoin holdings more than offset improvement in its operating business. During the quarter, it sells the 10,000 BTC for 124.7 billion yen, temporarily holds the proceeds in cash, stablecoins and other liquid assets, and then spends 149.9 billion yen to buy 11,000 BTC, paying 9.3% more per coin on average.

Metaplanet says the sale is intended to demonstrate to rating agencies and bond investors that it can convert Bitcoin into cash to meet financing obligations. At the end of September, its holdings stand at 44,000 BTC, up by a net 1,000 coins from the prior quarter.

The company also increases borrowing against its Bitcoin during the quarter, with the amount owed under its credit line rising to $649.5 million at the end of September from $414 million at the end of June. It says Bitcoin purchases from the second quarter onward are funded with money drawn under the credit line, proceeds from bond sales, the exercise of stock acquisition rights and revenue from its Bitcoin options business.

Interest expense rises 56% from the previous quarter to 1.36 billion yen, while short-term borrowings and bonds payable total 110.5 billion yen at the end of September. For the nine months through September, revenue rises 30.5% to 5.9 billion yen and operating profit increases 26.5% to 3.48 billion yen, but Metaplanet cuts its full-year revenue forecast to 6.5 billion yen from 16 billion yen.

Index removals and weaker Bitcoin add risk

Metaplanet's results arrive as publicly traded Bitcoin treasury companies face broader market pressure from benchmark index changes and lower cryptocurrency prices. MSCI confirms on Wednesday that Strategy, Metaplanet and Upexi are removed from its equity indexes at the Nov. 30 market close, a move that could force funds tracking those benchmarks to sell the shares.

JPMorgan previously estimates that Strategy's removal alone could trigger roughly $2.8 billion in selling pressure from MSCI-linked funds. At the same time, Bitcoin falls below $70,000 on Friday and trades around $68,600 as of 4:51 p.m. UTC, down about 9% over the previous week, adding to the pressure on companies whose balance sheets are closely tied to the token's market value.

Previously, we examined the Bitcoin sell-off that pushed BTC/USD below $70,000 amid heavy liquidations and Fed-driven risk aversion.

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